Is my unpaid tax debt considered marital debt in a divorce?
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Is my unpaid tax debt considered marital debt in a divorce?
Due to circumstances beyond my control, from 2005-2009 my taxes went unfiled (tax preparer going to jail). Anyway I recently got everything re-done and filed. I did so as married but separate, and there is a sizable balance due. I also recently filed for a divorce. Is she liable for half of that tax debt in a divorce settlement?
Asked on February 11, 2011 under Family Law, Utah
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
First of all, insofar as the IRS is concerend, by filing separately your wife will avoid liability for unpaid taxes due on your return (plus penalties and interest). As to her liabilbity for this debt in a divorce, it all boils sown to whether or not such debt is considered to be "marital debt". If you both had filed jointly typically it would be. However, since you filed married but separate, it could be argued that is it your debt and your debt alone. Conversely it could be argued that the debt was incurred for income earned during the marriage for the joint benefit of the parties or for a valid marital purpose; therefore your wife should also bear responsibility for a portion of it.
Without more specific facts of your case, it is hard to speculate. Also, laws vary state-to-state as does judicial interpretation. Right now, you or your wife need to consult with a divorce attorney, or even an accountant, as to the details of your situation.
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